The president and chief executive of its Canadian arm said Thursday the company plans to spend $15 billion on oilsands projects by 2020 but new upgraders won’t be part of those plans.

“I think in the medium term it’s difficult, that’s for sure, because the market for diluent and the market for product so far are not so favourable for upgraders,” said Andre Goffart, appointed to lead Total E&P Canada late last year.

“Also, the cost has been an issue but I will not say it’s out of the question because in this industry you see sometimes new technologies, different ways to develop those projects.”

Total said in a statement Thursday it will show a net loss of $1.65 billion in the first quarter of 2013 related to its investments to date through its 49 per cent stake in Voyageur.

But it added it will save $5 billion of upgrader investment over the next five years, spending it said was “no longer justified from a strategic and economic point of view.”

On Wednesday, Suncor Energy Inc. announced the 200,000-barrel-per-day, $11.6-billion project would not proceed, adding it would buy Total’s share of the assets for $515 million in cash.

Goffart explained that diluent — light petrochemicals used to dilute sticky raw oilsands bitumen to allow it to flow through a pipeline — was in short supply when the partners agreed to look at restarting the stalled Voyageur project in 2010.

If the upgrader had been built, the bitumen would be converted into a light synthetic crude oil which would not require diluent.

Since then, however, liquids-rich shale gas discoveries have provided a more than adequate supply, he said.

While raw bitumen produced in Alberta has been selling for a more volatile than normal discount to New York benchmark crudes recently, synthetic crude usually commands a premium.

Goffart said a careful examination of the economics still suggested there would be “marginal” returns despite higher realized prices because the upgrader was so expensive.

Total remains committed to the four other oilsands projects it is participating in, Goffart added. He said the company still hopes to be producing 200,000 bpd from the oilsands by 2020 but at a cost of $15 billion, not $20 billion, and with no upgrading.

Total has secured space on three proposed oil export pipelines — the Northern Gateway and Trans Mountain pipelines to the West Coast and the Keystone XL line to Texas, said Goffart.

Financial analysts who cover Suncor expected the upgrader cancellation but said the payout to Total came as a surprise.

In a note to investors, Peters & Co. said the payout covers physical assets Suncor plans to put to immediate use.

“The acquisition price of these assets was based on the book value, and we believe the purchase price is fair ... There was no real reason for these assets to continue to be held in the JV,” it stated.

In a report overnight, Michael Dunn, an analyst for FirstEnergy Capital, upgraded his rating on Suncor to “Top Pick.” Suncor’s share price has slipped six per cent in 2013.

“We expect the market will be getting more enthused about the company’s thermal growth opportunities over the next year or so, while a dividend increase announcement is expected within the next month or so,” he said.

Suncor stock closed in Toronto at $30.44, up four cents.

Suncor spokeswoman Sneh Seetal said the company is buying Total’s stake in a work camp called Hudson Lodge, a tank storage farm and a hot bitumen terminal and pipeline that will be useful in other Suncor operations, including its Firebag 4 in situ thermal oilsands project that began producing in December.

The announcement leaves the $5.7-billion Edmonton-area diesel refinery being built by North West Upgrading as the only active new bitumen processing project in the province.

Suncor’s Voyageur upgrader and Petro-Canada’s Fort Hills upgrader were both deferred as costs soared and crude prices crashed in 2008 and 2009.

Suncor took over Petro-Canada in 2009 and Voyageur was resurrected in 2010 by the partners to convert bitumen from the Fort Hills oilsands mine into refinery-ready synthetic crude oil.

The 160,000-bpd Fort Hills first phase is to face a sanctioning decision later this year and could be producing in late 2017, one year later than planned.

Total’s only current oilsands production comes from the Surmont steam-assisted gravity drainage in situ project it shares with ConocoPhillips, now producing about 25,000 barrels per day.

Goffart said Surmont is now the company’s main focus. It is building a 110,000-bpd expansion that is to be producing in 2015.

Total won regulatory approval last year for the 100,000-bpd Joslyn mine it plans to operate on behalf of partners Suncor, Occidental and Impex. There is no timeline on its construction and Goffart said sanctioning won’t happen in 2013.

Total also owns a 50 per cent interest in the proposed Northern Lights mine, with Chinese-owned Sinopec Corp. owning the remainder, but development is not contemplated in the near future.

Suncor said Wednesday it will take a charge against first-quarter 2013 net income of about $140 million and a charge against cash flow of $180 million. Seetal said the charges were related mainly to Voyageur contract cancellations.

Suncor took a $1.49-billion charge related to the upgrader in the fourth quarter of 2012.

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